The European market for flavoured and functional waters registered a 5% volume rise last year, according to a new report.

Food and drinks consultancy Zenith International said that the continent saw flavoured and functional waters deliver 3.6bn litres of sales in 2008, boosted by sales in East Europe, which achieved an 8% increase to 400m litres.

Flavoured water was again by far the largest segment, with 84% of the total. Functional waters, meanwhile, were responsible for the remaining 16%, advancing their share by 1% since 2007.

The 'Europe Flavoured and Functional Water Insights' report also noted that West Europe is the second largest regional market by volume globally, accounting for 24% share. Germany and the Czech Republic are the clear volume market leaders in West and East Europe respectively.

"Increasing public awareness about the benefits of hydration and mounting concerns over calories in other soft drinks have led to extensive innovation in flavoured and functional waters over the past few years," said Zenith's market intelligence director, Gary Roethenbaugh. "Scientific advances in tailoring functional ingredients to beverage-based applications have widened the opportunities for functional products."

Future growth catalysts will differ greatly between regions: for the more mature West European market - repositioning, rebranding and continued investment in marketing; for emerging flavoured functional water markets - organic growth through new product launches.

Looking forward, Zenith predicts a positive future outlook for European flavoured and functional waters, with a focus on ongoing flavour development tailored to local consumer preferences. The majority of additional demand is forecast to come from East Europe.